Gambia: The Results of First Research On Remittances in the Country
Banjul, Gambia, December, 28 2011 -
Women's World Banking Research has shown that its purpose is to promote the development of remittance products for customers of microfinance institutions in the Gambia, especially women, and exploring opportunities in the vibrant, untapped Gambian remittance market.
According to Anjali Banthia, Senior Consultant of Women's World Banking, remittances represent a large, exciting untapped market and that over 70% of people interviewed had a relative living abroad and over 80% of them received remittances, which is 11% of GDP; or roughly $90 million in remittances annually
The Consultant said one-third comes into the Gambia through informal sources, adding that inflows and savings in the household also increase when these transfers go into financial institutions. She said Rural communities are under-served and that urban areas have stiff competition. She said 55% of payout locations are in urban areas, compared to 23% of the population living there. Banks and forex bureaus, she said, capture most of the formal market and are urban-focused. She said FIG Bureau de Change has the most payment points (11% share) and Trust Bank processes most transactions (12-13,000 per month).
Banthia said on little cross-selling, the average receiver collects $650 per year and that the vast majority collect cash and leave. She noted the existing opportunities to help receivers manage cash and reach financial goals and that a strong informal savings culture is not being captured.
She said migration is expected to increase in the Gambia; that the median year was 2004. She disclosed that about 60,000 Gambians live abroad and that 10-15% of them are in Spain.
These migrants, she said, are mostly men and more women are expected to go abroad in future which has a development impact.
The Consultant said over 70% claim that they or another family member are considering migrating abroad within the next 12 months.
She said the transaction costs are high and that the cost of sending money to the Gambia is above 11% and more expensive than the average in Africa (10%). She added that distances can be far to travel in rural areas.
WU, she said, is dominant but their share is declining; 59% share but this has dropped to 4% in the past 2 years.
On the argument why targeting women for financial inclusion, the Consultant said women are a good target for financial services, especially savings and remittances.
Many women, she said, have significant and increasing financial responsibility in the house and that they are earning and making more financial decisions than ever ('solve own problems').
Women, she added, are the savers in their households and are often responsible for managing remittances (which form on average 50% of household income).
She said Women want support to grow and differentiate their businesses and help to manage other financial pressures.
Banthia said women are crowded in highly competitive, low-skilled, low-paid work. She said their main problem is that their businesses suffer from lack of investment of money and time and that education and housing are high priority areas for the family.
She added that women are not well-served by formal financial services.
She highlighted the gaps in coverage in the market and low awareness of formal financial tools as well as the urban bias of most banks.
Banthia also noted the vibrant informal and community-based mechanisms with a strong savings culture such as the osusus, visacas and goods on credit.
She highlighted the strongly held perceptions against formal banking due to bank failures and cultural beliefs about borrowing.
She also noted that credit unions are making inroads and there is some growing use of banks in urban areas for women.
The Consultant said the successful Gambian businesswomen can be role models for others, adding that .women look to other local women as role models and who can be use in marketing campaigns.
On Feedbacks on Reliance, she said some have experienced with saving and borrowing with Reliance in urban areas and that they value convenient locations near markets in the Greater Banjul Area but that pnetration was still low as some had heard about Reliance but wanted more information and follow up.